© ARCHIVE COLLECTION / BILDAGENTUR / ALAMY / COMPOSITE BY DAVID MCALLISTER / PROSPECT
The revered thinker David Ricardo was clear about his task. His masterpiece, On the Principles of Political Economy and Taxation (1817), opens by defining “the principal problem in political economy” as “the laws which regulate” the division of “the produce of the earth” between the “classes”. Since those words were written, it’s been fair to call Ricardo “the economists’ economist”—equally admired by Marx and the free-market right—which sets up an intriguing mystery. Classes and the divisions between them underpinned everything for him, and for many of his followers over the subsequent 100 years. However, by the late 20th century, interest had declined to the point where the big social divide barely featured within the discipline that Ricardo helped to found. So: who killed class in economics?
By the time I was a young researcher in the late 1990s, the word had vanished from the lexicon. Some of us tracked inequality trends, but to the high and mighty of the profession such work was mere description. Serious economists saw their job as different: analysis. Unfortunately, their analysis was selective. They would grapple with what trade, tech or education meant for different workers, but barely engage with the big split between those workers in general and their bosses. Instead, they offered soothing suggestions that the growing gap wasn’t all it seemed. When it transpired, for example, that inequality in families’ spending hadn’t risen as much as for incomes, this was latched onto as a sign of mere volatility—people sensibly “smoothing” consumption as their finances bobbed around. I recall surprise at a seminar when I asked whether this income-expenditure mismatch could instead be a sign of the impoverished running down assets or building up debt.